Skolnick - The Sucker Traps - Part 3
The Impending Bond Collapse
By Sherman H. Skolnick
What is it that they do not teach at the most supposedly
prestigious business schools, such as at Harvard or Rockefeller's University
Not part of the curriculum are the ways in which "the
powers that be", the Establishment, the Ultra Rich, the Ruling Class---whatever
is labeled as THEM---further enrich themselves on the backs of the common
How, then, do the sons and daughters of the Aristocracy
learn how to do such things? Simple. It rubs off on them just by growing
up among their elders. It becomes second nature to them. Since the more
ordinary people do not grow up in such an environment, they do not ever
understand the mindset of plutocrats..
THE UNSPOKEN PRINCIPLES OF FINANCIAL AND GEOPOLITICAL
 DO NOT FOR A MOMENT HESITATE TO DO WHAT IS NECESSARY
TO YOUR AGENDA. CONSIDERATIONS OF MORALITY AND HUMANITY ARE NOT TO BE CONSIDERED.
IF YOU CAUSE GREAT RUIN OR BLOODSHED, SO WHAT!
The Ultra Rich felt endangered by their creation, the
Soviet Union. So the oligarchs in the U.S. and England financed the rise
of Adolf Hitler, as a bulwark against the Moscow government.
For examples, refer to "Wall Street and the Bolshevik
Revolution" by Antony C. Sutton and also his opus, "How the Order
Creates War and Revolution"(the Order being such as the Skull &
Bones Secret Society) and his book, "Wall Street and the Rise of Hitler".
The very wealthy Americans such as the Rockefellers,
shared profits with Nazi big business even in the midst of World War 2.
"Trading With the Enemy" by Charles Higham.
The British Monarchy, secretly pro-Nazi, through their
ownership of Prudential Insurance Company of Newark, New Jersey, controlled
and selected what targets, if any, in wartime Germany were bombed by the
Allies. Knowing the value and insurance of corporate properties in Nazi
Germany, Prudential was in charge of the Strategic Bombing Survey. (A well-equipped
library has books on the S.B.S.)
So, for example, the Nazi chemical octopus, I.G. Farben,
was NOT bombed and was 93 per cent intact at the end of the conflict. (See
"I.G. Farben" by Richard Sasuly, a book by a U.S. military officer
in charge of the end of the war survey of Farben.).
Because of the business tie-in with General Electric
of the U.S., their facilities in Nazi Germany were not bombed. [See, Sutton's
documented work, "Wall Street and the Rise of Hitler".]
 PUSH AN IMPENDING FINANCIAL WRECKAGE ON TO THE SUCKERS.
The pundits for the super rich pushed the high tech wreckage
onto the ordinary people. So, mouth-pieces for the major brokerage houses
promoted the telecoms, the computer wonders, and the energy shysters, onto
ordinary people, as a "good investment". More and more of those
dot.coms are into bankruptcy or soon there.
 AFTER A FINANCIAL MARKET HAS BEEN PLUNDERED BY THE
ULTRA RICH, PUSH THE ORDINARY SO-CALLED "INVESTORS" ONTO SOME
OTHER FINANCIAL TRICK, TO CLIP THEM.
That is sort of like the crowd rushing from one side
to another. An analogy from history might be useful. Early in the 20th
Century, a major Chicago-based company arranged an outing for their employees.
Over a thousand persons gathered, like for a party, on a boat in the river
in Chicago. To watch some other event, all those on the vessel ran to the
other side of the ship, which, thus unbalanced, capsized. Nine hundred
ordinary employees were drowned. Of course, that was an accident.
NOT an accident is the way the suckers fleeced in the
equity markets are being shoved into BONDS. Cynics purposely mispronounce
it as BOMBS. The innocents are thus made to run from one side of the financial
ship to the other. Will the financial markets vessel capsize?
Various types of bonds are vulnerable, so are so-called
"money market funds". By the time you see, if at all, the
periodic prospectus of a money market fund, the data is stale. You do NOT
find out what the fund is into NOW. Are they trying to temporarily boost
the return by hocus-pocus book-keeping, called derivatives? Are they using
highly hazardous hedging tricks? Are they invested in commercial paper
of companies on the verge of bankruptcy? Brokers pushing clients into "money
market" funds are not about to tell you.
A typical conversation of a broker to a client. "So,
you do not like stocks? Fine. We'll put you into Municipal Bonds".
Not identified are the municipal bonds actually issued for private and
non-governmental purposes. In a bad recession, will the purposes generate
enough funds to pay the municipal bondholders? And get this. Municipal
bond GUARANTEE FUNDS are considered by savvy sorts as a bad joke. Do they
have enough reserves to make good possible widespread municipal bond defaults?
Then there are the so-called "Federal Agency"
securities. These are known in the financial trade as GSE, "government-sponsored
enterprises". Fannie Mae, Ginnie Mae, Freddie Mac. These securities
and mutual funds supposedly investing in them as a go-between for mutual
fund holders, are peddled by brokers and others as if they are securities
actually guaranteed by the Full Faith and Credit of the U.S. Treasury.
Sponsored by Vanguard Funds is Bob Brinker, a long-time
pusher on the radio who urges listeners to invest in mutual funds holding
Ginnie Mae securities. He tells the listeners that such securities are
backed by the U.S. Treasury. Some, however, have substantial doubts.
Not much publicized was the Dow Jones wire service item,
dated 8/5/02, datelined New Orleans. "Government officials and investment
experts worried about the impact on stock prices of alleged corporate accounting
fraud are paying too little attention to risks inherent in other securities
widely regarded as being safe, according to William Poole, president
of the St. Louis Federal Reserve Bank.
"Speaking at the Council of State Governments' Southern
Legislative Conference, Poole said that certain government-sponsored private
agencies, including Fannie Mae, Freddie Mac and the Federal Home Loan Bank
System, are undercapitalized relative to their debt load.
"He said if the imbalances of these and other so-called
government-sponsored enterprises go undressed, they could lead eventually
to a capital crisis that would send a shock through the U.S. housing market."
Further referring to Poole, "Similarly, he said,
'no one should underestimate the potential importance of the ambiguity
over the financial status of the GSEs.'
"A serious problem, he said, is 'the market prices
GSE debt as if there is a FEDERAL GUARANTEE, or a high probability of a
guarantee, standing behind the debt. YET, THERE IS NO EXPLICIT GUARANTEE
IN THE LAW'.
"Poole recommended that the federal government act
to dispel the notion THAT FANNIE MAE, FREDDIE MAC and some other GSEs ARE
FULLY BACKED BY THE GOVERNMENT." (Emphasis added.)
Typical of their method of operation, the Ultra Rich,
having taken themselves ouf of so-called "Federal Agency" securities,
have pushed them onto the suckers who sooner or later will get clipped.
Seldom mentioned is the history of U.S. Treasury securities.
Starting about the fall of 1979, was a U.S. Ruling Class
liquidity crisis, falsely referred to by the press-fakers as a "U.S.
To try to calm know-nothings, the head of the private
central bank, the Federal Reserve, held a rare joint press conference with
then President Jimmy Carter. The commotion revolved in part around gold,
considered by some as "independent money".
Tending to undermine the validity of paper money, gold
prices by 1980 peaked temporarily at over 800 dollars per ounce. By
1981, U.S. Treasury securities were priced in the market to yield 16 and
one-half per cent. The yield goes up as the price of the bonds go
down. Some U.S. Treasury paper was priced near 75 cents to the dollar
face value of the bond. The best corporate business risks paid a minimum
of 21 and one-half per cent for capital transfusions.
In all the commotion, never discussed in the oil-soaked,
spy-riddled monopoly press, was the way some foreign investors were protected.
Since the fake embargo/oil crisis of 1973, major buyers of U.S. Treasury
paper in Japan and Saudi Arabia have had THEIR purchases backed by
U.S. Gold. Of course, there is no such guarantee for U.S. residents. And
the alternative press in the 1970s forced a partial audit of Fort
Knox. The opening of just one vault there showed the supposed depository
of U.S. gold did not have it. All that was found was some orangish-looking,
poor quality gold-like stuff, apparently melted down gold coins from the
1934 seizure of gold by the Roosevelt White House. Forcing even this partial
audit was the Chicago-based tabloid "National Tattler", (now
defunct), in which a key role was played by crusading journalist Tom Valentine.
According to a published statement of a U.S. General, he led a convoy of
trucks taking away most all the gold of Fort Knox about 1968 to New York.
It was shipped to London, to try to stem a run on the gold in the Bank
Currently, Japan owns about forty per cent of U.S. Treasury
Securities. Japan needs to bail-out their greatly insolvent banks, many
of which are the largest in the world. On a pre-arrangement with the American
aristocracy, the Japanese may suddenly dump their U.S. Treasury paper which
may suddenly, like in 1980-81, decline to 75 cents per dollar face value,
or even lower. Thus in part renouncing the U.S. debt and impoverishing
ordinary folks but further enriching the oligarchs.
This would be joined at the same time with an attack
or "run" on the so-called "U.S. Dollar", actually hot-air
Federal Reserve notes. In simple terms, the Establishment considers ordinary
Americans as the enemy, to be plundered. Attention was diverted for many
years by the press whores, on behalf of the Ultra Rich, leading ordinary
folks to believe the "enemy" was the Moscow government, now becoming
more and more a trading partner with U.S. Big Business and Big Oil.
Who dares mention an historical truism? That is, that
sooner or later, every sovereignty repudiates their debt which they knew
all along they could not pay back. A very astute observer on international
finance, forty years ago and more, was Franz Pik. He would impart his wisdom
to a select, small cricle in closed meetings. Each listener paid one thousand
dollars to sit there and hear him, at a time when that amount of money
was considered huge.
Who dares mention that the watering down of the paper
money and the renouncing of the debt, led, in part, to the French Revolution
and the chopping off of the heads of the King, Queen, and the French aristocracy.
Refer to the book, "Fiat Money Inflation in France" by Andrew
Dickson White, written in the 19th Century but still true now.
Studying the class structure is not a popular subject
in American education. Some contend it is a feel-it-in their-bones known
subject in England and elsewhere. So common Americans are generally completely
blank on this, when it come to understanding Class.
Special note to the naive and poorly-informed: We are
NOT shills for some type of investment house or brokerage. Hence, do NOT
bombard us with requests as to WHAT we recommend to put your paper money
into, to save yourself. Our upcoming follow-up story, about the impending
Real Estate Crash might nevertheless be helpful.